Following Sony, Microsoft puts Xbox on recession special

Want an Xbox 360 for Christmas? Good news: Microsoft (MSFT) has cut the price on its high-end Xbox model by $100 just in time for the fall holiday shopping season, the company announced Thursday morning. The move comes just days after Sony (SNE) also reduced the price of its PlayStation 3 by $100 in hopes of enticing holiday shoppers.

Starting Friday, Microsoft will cut the price of its Xbox 360 Elite console to $299.99; the price of its Xbox 360 Pro console will be reduced by $50 to $249.99.

Microsoft's Xbox price cut is a clear indication that the company, whose worse-than-expected earnings last month battered its stock price, is feeling uneasy about consumer spending amid a severe recession with unemployment reaching 10 percent, and even exceeding that in several states.

"With the holiday season right around the corner, it's already time to start looking for entertainment and gifts that everyone will enjoy," Shane Kim, corporate vice president of strategy and business development for the Interactive Entertainment Business at Microsoft Corp., said in a statement. "If you're looking for deep experiences that don't require deep pockets, now is the time to purchase an Xbox 360," Kim said.

Microsoft's Xbox trails Nintendo's Wii console in U.S. market share, but the Xbox has shown improvement, with sales up 17 percent this year.

Microsoft spokesman David Dennis told Reuters that the price cut was not a tit-for-tat move in response to Sony's earlier price cut, but had been planned for some time.

"It really makes the decision for consumers a lot easier," Dennis said. "They're either price conscious and they gravitate toward the Arcade or they the want the full Xbox 360 experience."

Aaron Greenberg, Microsoft's director of product management for Xbox 360 and Xbox Live, echoed the message that the price cut had been in the works for some time.

"I'm sure some will think this is a response to competitor pricing," Greenberg told CNET News.com. "But we had planned this reduction months in advance. Retail circular ads and store merchandising were all lined up. We wanted to be ready for the holiday season."